Consumers may be able to get some of their spent cash back if they utilise cashback credit cards. These cards will allow the user to earn a percentage of their spend back every time they use the card.
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As an example, if a card pays two percent cashback and the holder spends £100 in a shop they will earn £2.
This cashback is generally paid annually and in some instances, cashback credit cards credit the amount earned onto the account holder’s statement, reducing the overall bill.
In other instances, cards will send the cashback to a bank account so the holder can spend it or convert it to points or vouchers.
Cashback can also be offered through specific current accounts provided by banks and other financial institutions.
Cashback cards can be beneficial for spenders but those looking to take advantage of these products may not have the best time of it at the moment.
According to the latest research from moneyfacts.co.uk, current account cashback benefits have been slashed or will be tweaked in the coming months and there are now only eight cashback credit cards on the market, the lowest seen in 10 years.
They revealed that last week Santander announced it was changing the cashback offered on its current account range from October and would be increasing the account fee on its 123 Lite Current Account, just a few months after it had capped the cashback.
NatWest also scrapped its cashback offer on bills on its Reward Current Account this year.
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Additionally, moneyfacts found that cash incentives to switch their bank account will also be disappointed to find that there no offers right now, as they were scrapped due to the influence of the Coronavirus pandemic.
While the selection may not be great at the moment, the company did collate the options available at the moment as detailed below:
- American Express Platinum Cashback Card – Intro five percent for six months from £1 to £2,500 spend (max £125), then one percent standard from £1 to £10,000, 1.25 percent over
- American Express Platinum Cashback Everyday Card – Intro five percent for six months from £1 to £2,000 spend (max £100), then 0.50 percent standard from £1 to £5,000, one percent over. Must spend £3,000 annually to earn cashback
- Santander All in One Credit Card Mastercard – 0.50 percent on spends over £1 per month
- Santander World Elite Mastercard – 0.50 percent on spends over £1 to £3,000 per month
- smile Classic Credit Card Visa – 0.25 percent on spends over £1 per month
- Barclaycard Rewards Visa – 0.25 percent on spends over £1 per month
- Vitality American Express Credit Card – 0.50 percent on spends over £1 to £5,000, then 1 percent over. Additional cashback depends on activity points and in addition if an eligible Health or Life plan is held. Must spend £3,000 annually to earn cashback
- AIB Visa Option 1 (Existing Customers) – 0.50 percent on spends of at least £5,000 per month (max £250)
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Rachel Springall, a Finance Expert at moneyfacts.co.uk, commented on these findings
As she noted: “There may well still be a hint of caution for shoppers to venture out onto the high street to start spending, but those who are determined to go back to normality and for those who use a credit card to make purchases from home, they may wish to make something back from their purchases.
“As it stands, consumers will not find any cash perks when switching their current account, and banks are changing other benefits due to the Coronavirus pandemic.
“According to UK Finance, spending for April fell by 50 percent year-on-year and according to FICO, the average spending on UK credit cards dropped by 26.5 percent between January and May 2020 compared to the same period in 2019.
“However, recent figures from Barclaycard suggested an average of £771.34 was spent per person during lockdown and a third of people surveyed found the purchases made lockdown more enjoyable.
“This then suggests some consumers have disposable income spare and spending could therefore rise in the months to come.”
She concluded with a warning: “Clearly consumers will need to be savvy and shop around for a lucrative cashback credit card if they hope to get something back when they spend, but they may wish to act quickly as there is no telling how long these offers will last and they could get cut in a similar way to how current account perks have been culled.
“As with any card spend, it’s a good idea to clear the monthly balance before interest applies as this could wipe out any cashback gained.”
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